What is Fannie Mae?
Fannie Mae is a congressionally chartered secondary-mortgage market company that buys loans from private lenders. Because the firm is so big and has been involved in purchasing packages of loans from lenders for 25 years, it has enormous influence on the mortgage market. For more information, call Fannie Mae at (800) 732-6643.
The Federal National Mortgage Association, commonly known as Fannie Mae, trades under the New York Stock Exchange ticker symbol FNMA. Fannie Mae was established in 1938 by the US Congress as a Government Sponsored Enterprise, or GSE. While Fannie Mae does not have an explicit guarantee of government backing, it is widely regarded being too important to fail. Fannie Mae is responsible for maintaining a secondary market in home mortgages. By ensuring that mortgages meeting specific criteria can be readily traded among lending institutions and investment banks, Fannie Mae increases the ability of lenders to provide long term mortgages. A direct benefit to consumers is that mortgage interest rates are lower than they would otherwise be. For example, so-called Jumbo mortgages, which are loans larger than Fannie Mae will accept, generally carry an interest rate as much as one-half percent higher. Fannie Mae’s business consists of buying and pooling conforming loans. Conforming loans must mee
